Groupon (GRPN) Stock Gains Ahead of Earnings Release
NEW YORK (TheStreet) -- Groupon (GRPN) - Get Report stock is increasing 4.7% to $4.01 in afternoon trading on Tuesday, before the company is scheduled to announce its financial results for the third quarter of 2015, due out this afternoon after the market close.
The company is expected to report a year-over-year decline in earnings and revenue for the quarter.
Analysts have estimated earnings of 2 cents per share, compared with 3 cents per share that the company posted for the third quarter of 2014.
Revenue is expected to decline 3.2% year-over-year to $732.74 million from $757.05 million after the company exited seven markets near the end of the third quarter.
Groupon ceased operations in Morocco, Panama, The Philippines, Puerto Rico, Taiwan, Thailand and Uruguay in September.
The Chicago-based company operates online local commerce marketplaces where consumers can buy goods and services at a discount.
Separately, TheStreet Ratings team rates GROUPON INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate GROUPON INC (GRPN) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 38.17%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 50.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Internet & Catalog Retail industry and the overall market, GROUPON INC's return on equity significantly trails that of both the industry average and the S&P 500.
- GROUPON INC's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GROUPON INC continued to lose money by earning -$0.08 versus -$0.14 in the prior year. This year, the market expects an improvement in earnings ($0.13 versus -$0.08).
- 49.89% is the gross profit margin for GROUPON INC which we consider to be strong. Regardless of GRPN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GRPN's net profit margin of 14.77% significantly outperformed against the industry.
- Net operating cash flow has significantly increased by 174.63% to $16.98 million when compared to the same quarter last year. In addition, GROUPON INC has also vastly surpassed the industry average cash flow growth rate of 53.39%.
- You can view the full analysis from the report here: GRPN